Plumbing Business Insurance: Types, Costs, Providers & More

Plumbing insurance refers to a type of protection plumbing businesses invest in to mitigate risks from lawsuits, theft, and property damage.

There are different types of insurance that plumbing contractors should consider, such as:

• Commercial auto insurance and general liability

• Workers’ compensation

• Business owner’s policy

• Surety bonds

• Umbrella insurance policy

• Equipment coverage

Whether you’re just starting your business or shopping for additional coverage or add-ons, finding the right plumbing business insurance is an important step as you plan for your plumbing company’s growth. We’ll define the most common plumbing insurance policies to help you choose what types of insurance to consider to protect your investment.

Disclaimer: ServiceTitan doesn’t claim to be insurance specialists or financial advisors, and is presenting this information for educational and informational purposes only. Consult experts for your insurance and financial planning needs.

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What Types of Insurance Do Plumbing Contractors Need? 

To determine which types of coverage suit your plumbing company’s needs, it’s important to understand some of the most popular plumbing business insurance policies, such as: 

• Commercial general liability Insurance

• Workers’ compensation insurance

• Commercial auto insurance

• Commercial property insurance

• Business owner’s policy

Commercial General Liability Insurance

Commercial general liability Insurance is the type of policy that covers a business for personal injury and property damage.

Many mishaps can occur in plumbing system work, from a water-heater repair resulting in water damage to a faulty sump-pump installation. Plumbers’ liability insurance covers accidental injuries and property damage related to plumbing issues.

In many places, proof of general liability insurance is required to obtain a plumbing contractor license or when signing a commercial lease or client contract.

Plumbing liability coverage protects your business if your company’s work causes property damage or bodily injury to customers.

Examples of plumbing liability insurance coverage are:

• Repair costs for property damage to a customer’s home

• Physical injury to a customer leading to a lawsuit

• Plumbing installation problems

Workers’ Compensation Insurance

Workers' compensation insurance is the type of policy that pays the medical bills and payroll costs of employees injured while working for your plumbing company. Many states require workers’ compensation insurance for plumbing businesses that employ workers. 

Workers’ compensation insurance ensures your injured employees get medical care and compensation for lost wages if they’re injured on the job, and it usually protects employers from lawsuits. 

Overall, the construction industry experienced 1,075 fatal work injuries in 2023, the second most of any industry sector, according to recent data from the Bureau. 

Tip: Follow these nine plumbing safety tips to keep technicians safe.

Each state has different workers’ compensation requirements for employees or for those who hire subcontractors. To find out your state’s requirements, visit your state’s workers’ compensation commission website.

Commercial Auto Insurance

Commercial auto insurance is a type of business insurance that provides liability and physical damage coverage for vehicles used for work.

Plumbing service technicians usually drive from one job to the next in company vehicles. If your employee causes a collision, it could result in costly property damage and medical costs if it involves injury to another motorist. 

Most states require registered vehicles to carry liability insurance. Just as you protect your personal vehicles with insurance, it’s necessary to have commercial auto insurance to protect your company’s vehicles and provide protection for you and your employees.

Commercial auto insurance can protect your company-owned vehicles from:

• Collision damage to another driver’s vehicle

• Property damage in an accident

• Medical bills arising from a third-party injury

• Theft or vandalism

Commercial Property Insurance

Commercial property insurance is the kind of insurance that protects a business’s physical assets from unexpected situations like fire outbreaks, weather events, and even theft.

Similar to a homeowner’s insurance policy, business personal property insurance protects your business property investment, including office space and any tools or equipment stored on company-owned or leased property. 

A commercial property insurance policy typically covers the cost of the building, if owned by the business, and contents owned by the company, in the event of disasters such as fire or vandalism.

Business Owner’s Policy (BOP)

A business owner’s policy is the insurance policy that bundles commercial general liability insurance and commercial property insurance. Hence, it covers personal injury or damage caused while on the job, repairs and equipment losses at the company’s office, and other property used for the plumbing business.

To be eligible for most business owner’s policies, your plumbing company must:

• Employ fewer than 100 people

• Make less than $1 million in annual revenue

Since a BOP is generally a more affordable option than individual policies, it can offer a flexible solution for plumbing companies trying to grow their businesses.

Some BOPs also include business interruption coverage, providing plumbing business owners with financial assistance if they’re forced to close or relocate for repairs after a covered disaster.

BOPs do not cover professional liability, auto insurance, workers’ compensation, or other employee insurance. You will need to purchase separate insurance policies to cover your plumbing company’s professional services, employees, and company vehicles.

A business owner’s insurance policy can be tailored to meet your company’s needs. Depending on your insurance provider, you can add coverage to a BOP for:

• Data breaches

• Equipment breakdown

• Employment practices liability

• Loss of income

Which Plumbing Insurance Programs Cover Additional Liability Risks?

Beyond general liability, plumbing contractors face additional risks, including professional mistakes, environmental damage, employee lawsuits, and even cyberattacks. These exposures aren’t always included in a standard policy. 

Considering these protections is important because simple mistakes in your plumbing business could lead to costly claims. Choosing an insurance program that offers these options ensures your coverage goes beyond basic property damage and injury, protecting your business from less obvious but equally serious liabilities. 

Here are the insurance programs that cover these additional liability risks:

Umbrella Liability Insurance

If a civil suit judgment or other incidents exceed your plumbers’ liability insurance or BOP limits, an umbrella liability insurance policy is your assurance that your plumbing company can cover the additional costs.

In essence, umbrella liability is a backup policy to provide extra coverage and protection for your company. An umbrella liability policy typically provides extra coverage for general liability insurance, commercial auto liability insurance, and employers’ liability insurance, a component that’s often included in workers’ compensation.

Umbrella liability policies do not cover claims related to commercial property insurance or professional liability insurance.

Equipment and Inland Marine Insurance

Plumbing tools and equipment are necessities in the plumbing industry. Insurance protects in the event of stolen tools or damaged equipment in an accident.

Equipment insurance can be added to your plumber liability insurance or BOP. It generally offers coverage for small tools, mobile equipment, and equipment less than five years old, but does not cover damage from general use and wear.

More expensive equipment might require inland marine insurance, especially if your company ships high-value products or equipment. An installation floater is a type of inland marine insurance that covers materials in transit until the product or equipment is installed or put to use.

Check out our article Plumbing Van Organization: Maintenance Tips & Best Practices. 

Surety Bonds

Although not technically insurance for your plumbing company, a surety bond ensures your company’s plumbing work meets professional construction standards.

Many municipalities and states require a minimal surety bond for plumbing contractors seeking a contractor license or permit.

A surety bond involves three parties: the obligee (the entity requiring the bond), the surety (the bonding company that issues the bond and guarantees the work), and the principal (the plumbing contractor). It’s different from insurance for plumbers because you repay the surety company for successful customer claims.

Bonds guarantee your work, so homeowners and business owners have the confidence you’ll do the job right. If you don’t, they know they’ll be reimbursed if they can prove they paid for illegal or incomplete work.

Are There Plumbing Insurance Requirements for Licensed Contractors?

Do plumbers need insurance? Plumbing licensing requirements vary by state and municipality. In many states, obtaining a plumbing contractor license requires proof of general liability insurance or bodily injury insurance, and some require additional insurance policies.

Florida, for example, requires $100,000 liability insurance and $25,000 property damage insurance before granting a certified plumbing contractor license. In Illinois, plumbing contractors must prove they have $100,000 general liability, $300,000 bodily injury, and $50,000 property damage coverage.

It’s important to check in the area where you operate to make sure you have all the necessary licenses, permits, and insurance requirements in place to avoid facing any legal problems along the way.

How Much Does Plumbing Insurance Cost?

The average cost of small-business insurance varies because certain risk factors and specific coverage limits determine the rates for business policies.

Your plumber insurance cost depends on: 

• Location and size of service area

• Company revenue

• Number of employees

• Technical and business experience

• Type of plumbing insurance

Because you work on a customer’s property in a high-risk profession, your plumbing liability insurance needs and the average cost of small-business insurance will be higher than those of other industries. 

A standard plumbing liability insurance policy for small businesses provides up to $1 million in coverage per claim and up to $2 million total during the policy lifetime, and costs between $27 and $49 per month, according to General Liability Insure.

A typical premium range for a BOP with the same amount of claim coverage is $750 to $2,400 per year, with a maximum deductible of $1,000.

Commercial auto insurance premiums cost an average of $2,704 annually, while contractor tools and equipment coverage costs approximately $224 annually, according to Insureon.

Your plumbing company may be able to save by bundling some of your plumbing contractor’s insurance policies into one plan.

Workers’ compensation rates are based on every $100 of your business payroll but vary depending on the state your business resides in, risk factors of the industry, and your company’s claims history, according to insurance companies.

What Are Some of the Best Plumbing Insurance Companies to Consider?

Below are some companies that offer insurance that you can consider for your plumbing business:

1. NEXT Insurance

NEXT Insurance is a U.S.-based, fully digital insurance provider designed for small businesses and contractors. It makes it easy for plumbing companies to purchase and manage coverage entirely online.

Source: NEXT Insurance

For plumbers, NEXT offers:

• General liability insurance

• Workers’ compensation

• Commercial auto insurance

• Tools and equipment coverage

NEXT also provides instant certificates of insurance (COIs), which can be shared with clients or general contractors directly from a mobile device.

Best for: Plumbing contractors in the U.S. who want fast, digital-first coverage with flexible monthly payments and easy access to COIs.

2. biBERK

biBERK, a Berkshire Hathaway company, offers tailored business insurance coverage for plumbing contractors, providing savings of up to 20 percent.

Source: biBERK

With biBERK, business owners can:

• Receive quotes instantly online

• Purchase a policy without going through a broker

• Manage documents and certificates digitally

• Submit and track claims online

Best for: biBERK is a great fit for plumbing businesses that prefer a digital-first, self-service insurance experience without sacrificing financial strength.

3. Thimble

Thimble specializes in flexible, on-demand insurance for contractors, including plumbers.

Source: Thimble

Its standout feature is the ability to buy short-term coverage directly through its website or mobile app. This is especially useful for plumbers who:

• Take on short-term subcontracting projects

• Only need additional coverage for certain jobs

• Want to test out coverage without committing to a long-term contract

Thimble offers liability coverage, workers’ comp, and tools and equipment insurance.

Best for: Plumbing contractors or solo operators who want pay-as-you-go coverage with no long-term commitment.

4. Gendron Assurance

Gendron Assurance is a Canadian-based brokerage that works with multiple carriers to design customized insurance packages for trade contractors, including plumbers.

Source: Gendron Assurance

It helps plumbing businesses:

• Bundle coverage (e.g., liability, property, vehicles) into one tailored plan

• Navigate regional compliance requirements

• Get personal support from a broker who understands local plumbing risks

Best for: Plumbing businesses in Canada or those with cross-border operations that require personalized guidance and access to multiple insurance carriers.

5. Hiscox

Hiscox has been in the insurance business for more than a century and insures more than 500,000 small businesses worldwide.

Source: Hiscox 

For plumbing contractors, Hiscox offers:

• General liability insurance

• Professional liability coverage (errors and omissions)

• Business property insurance

• Flexible monthly payment plans

Best for: Hiscox is well-suited for small to midsize plumbing businesses that require flexible policies and payment terms, particularly those with a focus on cash flow management.

How to Find the Right Plumbing Insurance Policy and Insurance Provider

To choose the right plumbing insurance provider, consider the following:

• Financial strength of the insurance company

• Its familiarity with insurance for plumbers

• Prices and benefits

Let’s discuss these factors in detail:

Financial strength of the company 

An insurance policy is only as reliable as the company behind it. Since claims are paid from the insurer’s reserves, you want to be confident the provider has the financial capacity to handle payouts, even in widespread loss situations.

Check ratings from agencies like AM Best, Fitch, Moody’s, or Standard & Poor’s, and stick with companies that hold at least an ‘A’ rating, which signals financial stability. Avoid providers with weaker ratings, as they may not be able to fulfill their promise.  

Familiarity with Plumbing Insurance

Not all insurers are familiar with the risks plumbers face, like water damage liability, tool and equipment coverage, or work performed in customers’ homes. 

Look for providers that specifically list plumbing contractors as part of their target market. This ensures your policy covers the unique risks in your line of work instead of leaving costly gaps.

Pricing and value of coverage

Premiums can vary widely between insurers, even for similar coverage. Make sure to get multiple quotes and compare not just the price, but also what’s included.

Ask about policy limits, deductibles, and optional add-ons (such as tools and equipment coverage). Remember, the cheapest policy isn’t always the best one if it leaves you underinsured.

Consider working with an insurance broker who can compare insurers on your behalf. A qualified insurance professional will conduct an analysis to help you determine what plumbing insurance policies you need and the amount of coverage to protect your company.

Once you know your needs and invest in financial protection, you’ll be ready to take the next step in your company’s growth.

How Long Does it Take to Fully Process Plumbing Insurance Claims?

There isn’t a one-size-fits-all timeline for plumbing insurance claims. The processing period depends on several factors, including:

• Type of claim: A straightforward property damage claim (e.g., water damage from a burst pipe) is usually processed faster than a liability claim involving third-party injury or negligence.

• Documentation quality: Insurers rely heavily on supporting documents such as invoices, repair records, and photos of the damage. The clearer and more complete your documentation, the smoother the process.

• Insurer’s internal procedures: Some providers offer digital-first claims handling, while others may still rely on manual review, which can extend timelines.

• Investigation needs: If fault or coverage limits are disputed, the insurer may need additional time to investigate before issuing a payout.

In general, minor claims can be resolved in a few weeks, while more complex liability or workers’ compensation cases may take several months to fully process. Contractors should maintain detailed job records and customer communications to help speed up this process.

Does Plumbing Business Insurance Need Renewal?

Yes, plumbing business insurance typically needs to be renewed, as most policies are written on an annual basis. Renewal ensures continued coverage for your operations, employees, and assets.

But renewal isn’t automatic in every case. Factors that may affect your renewal include changes in business size, claims history, and coverage adjustments.

To renew your plumbing business insurance:

• Review your current policy and note any gaps

• Contact your insurance provider or broker to confirm renewal terms

• Update business information (e.g., payroll, revenue, number of plumbers)

• Request updated certificates of insurance after renewal for clients and projects

How Can Plumbing Contractors Cancel Their Insurance Policy?

To cancel your insurance, you can contact your insurance provider or broker directly. Depending on the insurer, you may need to submit a written cancellation request or fill out a standard cancellation form.

Factors to consider before canceling:

• Coverage gap risk: Canceling without securing a replacement policy can leave your business exposed to financial liability.

• Refunds or penalties: Some policies allow prorated refunds for unused premiums, while others may charge early cancellation fees.

• Client requirements: Many commercial and residential contracts require proof of active insurance; canceling could affect ongoing jobs.

• Don’t assume cancellation is automatic: Failure to formally cancel can still leave you on the hook for payments.

Avoid leaving a coverage gap, even for a few days, as accidents or claims can occur at any time.

Last but not least, don’t cancel before confirming that a new policy is active and aligned with your current business needs.

How Plumbing Software Gives You Added Protection

In addition to having plumbing contractor insurance, it’s essential to keep track of every aspect of your company, from call tracking to inventory of materials and tools.

ServiceTitan Plumbing Software connects your office with the field and allows for real-time updates, wherever your team works. Track jobs and revenue, sort transactions, and compile stats with Field Reporting Software that streamlines your company’s efficiency and provides the data you need to know and grow.

And with Inventory software, you can manage all of your company’s inventory with a centralized workflow to track purchases, vendor returns, transfers, and adjustments in one place, ensuring your trucks are always ready to go.

Book a demo to find out how ServiceTitan software simplifies your plumbing business operations.